US Senators Propose Ending Payroll Tax Cap to Extend Social Security Solvency

Senators Elizabeth Warren (D‑MA) and Bernie Moreno (R‑OH) have introduced legislation to eliminate the $184,500 cap on Social Security payroll taxes. They argue the change would generate about $3 trillion over the next decade and extend the program’s solvency beyond the 2032 depletion date warned by trustees, which could otherwise result in a 22 % reduction in benefits.

The proposal has drawn mixed reactions. Advocates say it is a fair way for higher‑earning workers to contribute, while critics label it one of the largest tax hikes in U.S. history, warning that it could push top marginal rates above 60 cents on each additional dollar of income. Meanwhile, a new Penn Wharton analysis shifts the projected depletion of the Old‑Age and Survivors Insurance trust fund to February 2033 (or February 2035 when combined with the disability fund), only a few months later than earlier estimates, and notes that benefits would likely fall to roughly 80 % of current levels if no reforms are made. The debate continues over how to balance the program’s long‑term financial health with the tax burden on workers.